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<br />In the event that the Equipment or any portion thereof is damaged, but not in a manner that constitutes an Event of Loss
<br />under this Lease, then Lessee shall promptly notify Lessor of the occurrence of such damage and shall payor cause to be paid
<br />to Lessor all insurance proceeds, if any, received by Lessee and payable as a result of such damage, not later than the earlier
<br />of (a) the date that is sixty (60) days subsequent to the date such damage occurred or (b) the date of receipt of the insurance
<br />proceeds. Lessee shall thereafter or simultaneously therewith submit to Lessor a written cost estimate to repair any damaged
<br />item of Equipment to a condition equal to the condition of the Equipment before the damage occurred, from a repair facility
<br />selected by Lessee, and Lessor shall disburse to Lessee, or directly to such repair facility, at Lessor's discretion, from the
<br />insurance proceeds the amount necessary to effect the repair. In the event that the costs thereof are paid by Lessor directly to
<br />Lessee, then all costs of such repair shall be promptly paid by Lessee and Lessee shall not permit any liens to attach or remain
<br />attached to such Equipment.
<br />
<br />14. TAXES. Lessee shall pay promptly, when the same become due, and shall indemnify and hold harmless Lessor
<br />-= >m and against payment of, all license fees, registration fees, assessments, and sales, use, property, excise and other taxes now
<br />hereafter imposed by any federal, state or local government on or against the Equipment based on the ownership, lease,
<br />ltal, sale, possession or use of the Equipment, whether the charge is assessed against Lessor or Lessee, as well as any related
<br />penalties or interest, and Lessee will do everything required of Lessor in connection with said fees, assessments and taxes.
<br />
<br />Notwithstanding anything to the contrary in this Lease, the Lessee and Lessor agree the Equipment is exempt from taxation
<br />in accordance with the laws of the State of Texas, and that Lessee shall have the full right to administratively or judicially
<br />challenge any tax or assessment levied or attempted to be levied on the Equipment. Save and except to the extent it becomes
<br />necessary to pay any tax or assessment to protect the property and security interests of the Lessee, Lessor and Assignee, the
<br />Lessee may, 'in its sole discretion, elect not to pay any tax or assessment until such time as the tax or assessment is determined
<br />to be due and owing on the Equipment by a final and unappealed judgment issued by a court of competent jurisdiction.
<br />
<br />15. LESSEE'S FAILURE TO PAY TAXES, INSURANCE, ETC. If Lessee fails to make any payment or to do any
<br />act required hereunder, then Lessor shall have the right, but not the obligation, to make the payment or do the act, without notice
<br />to or demand on Lessee, and without releasing Lessee from any contract obligation, and to pay, purchase, contest or compromise
<br />any encumbrance, charge or lien which Lessor judges to affect the Equipment or Lessor's rights therein.
<br />
<br />16. T AX MATTERS. Lessee hereby represents, warrants, covenants and agrees that:
<br />
<br />a. Lessee is a public entity of the State, the interest on whose obligations of indebtedness is exempt from
<br />federal and state income taxation.
<br />
<br />b. Lessee will take no action that would cause the interest portion of the rental payments that will become
<br />e under this Lease (the "Interest Portion") to become subject to federal or State income taxation, and will take or cause its
<br />'icials, officers, employees and agents to take all action lawfully within its powers necessary to cause the Interest Portion to
<br />nain so tax -exempt. Should the IRS disallow the tax -exempt status of the Interest Portion as a result of any act or omission
<br />by Lessee, including, but not limited to, Lessee's ceasing to be a tax-exempt entity, then, to the extent permitted by law, Lessee
<br />shall be required to pay additional sums to the Lessor or its assignees so as to bring the after-tax yield to the same level as the
<br />Lessor or its assignees would attain if the Interest Portion continued to be tax-exempt.
<br />
<br />c. Lessee hereby designates this Lease as a "qualified tax-exempt obligation" as defined in Section 265(b)(3)
<br />of the Internal Revenue Code of 1986, as amended (the "Code"). To preserve the validity of such designation, Lessee (i) will
<br />take no action or not fail to take action if such action so taken or not taken, respectively, would cause this Lease to be a "private
<br />activity bond" as defined in Section 141 of the Code; (ii) reasonably expects that the aggregate face amount of all tax-exempt
<br />obligations issued or to be issued by Lessee and all subordinate entities thereof during the calendar year in which this Lease
<br />is dated, including this Lease, will not exceed $1 0,000,000.00 (excluding (A) "private activity bonds" as defined in Section 141
<br />of the Code, except qualified 501(c)(3) bonds as defined in Section 145 of the Code, and (B) current refunding obligations,
<br />to the extent that the amount of the refunding obligation does not exceed the outstanding amount ofthe refunded obligation);
<br />and (iii) Lessee will not designate more than $10,000,000.00 of obligations isslJed by Lessee and all subordinate entities thereof
<br />as "qualified tax exempt obligations" for purposes of Section 265(b)(3) of the Code.
<br />
<br />d. For purposes of Section 148(f) of the Code, which exempts obligations of certain "small governmental
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